In a handout photo from November, 1999, Buzz Lightyear (L) is forced to remind his pal '' Woody'' that he is a toy, a child's plaything after Woody discovers that he is a highly valued collectible in Disney/Pixar's animated comedy adventure film ''Toy Story 2.''

Credit: Reuters/Handout/File

Stocks

LOS ANGELES (Hollywood Reporter) - Woody and Buzz are heading north.

To accommodate a growing slate of nonfeature projects, Disney and Pixar will launch an animation studio in the fall in Vancouver.

The focus will be on Pixar's established characters, including Buzz and Woody from the "Toy Story" films and Lightning McQueen and Mater from "Cars."

"The operation will be small in size and dedicated to producing short-form quality computer animation for theme parks, DVDs, television and theatrical exhibition ... for several different divisions of the Walt Disney Co.," Disney/Pixar president Ed Catmull said.

Pixar general manager Jim Morris said he expects the staff to reach 75 to 100. He added that feature work and all stereoscopic 3-D work will still be done at Pixar's headquarters in Emeryville, California.

The venture is the latest example of a company opening a visual effects (VFX) or animation facility in Vancouver. Other residents include Rainmaker, an animation company; CIS Vancouver, a Deluxe-owned VFX business; and Moving Picture Co., a Technicolor-owned VFX facility.

Tax incentives, a local talent base and proximity to Pixar contributed to the decision. Pixar will receive incentives offered for animation production and research and development.

"Canada, and Vancouver specifically, has had terrific tax incentives for this type of work," Pixar general manager Jim Morris said. "I think they have a desire to grow this sort of business activity and get a critical mass. This will allow us to do more with the budgets that we have."

Morris said Pixar would step up production of its character-based ancillary content at the new venue.

"We have a somewhat unfulfilled demand," he said. "We wanted to do various things with 'Toy Story' to keep the characters alive. People like to see them somewhat regularly." He pointed to Pixar chief creative officer John Lasseter, who would like to do more with the "Cars" characters.

Pixar has a full slate of upcoming titles -- some sequels and some introducing new characters. "Up," the studio's 10th computer-animated feature and first to be released in digital 3-D, opens May 29 and introduces new characters, including elderly Carl Fredricksen and young wilderness explorer Russell.

The 3-D releases of "Toy Story" and "Toy Story 2" bring Woody, Buzz and the toys back to theaters October 2.

Current film projects at Pixar are the 3-D features "Toy Story 3," "Cars 2," "The Bear and the Bow" and "Newt." The studio also is developing a series of shorts based on the Mater character from "Cars" as well as theme park projects.